Altus Group Income Fund
TSX : AIF.UN

Altus Group Income Fund

March 17, 2008 16:44 ET

Altus Group Income Fund Announces Year-End Results

Management to Hold Conference Call on Wednesday, March 19, 2008 at 10:00 a.m. EDT

TORONTO, ONTARIO--(Marketwire - March 17, 2008) - Altus Group Income Fund ("Fund") (TSX:AIF.UN) today announced financial and operating results for the year ended December 31, 2007.

2007 Performance Highlights:

- Recorded year-over-year revenue growth of 54%

- Generated adjusted distributable cash of $1.64 per unit and distributed $1.20 per unit to unitholders resulting in a payout ratio of 73%

- Achieved strong organic growth across all businesses

- Successfully integrated 5 accretive acquisitions with an aggregate value of $69 million

- Completed $40 million private placement with Ontario Teachers Pension Plan

"2007 was a year of tremendous growth for Altus Group as we strengthened existing services with targeted acquisitions, generated superior financial results and put in place the foundation for additional international expansion," said Gary Yeoman, CEO of Altus Group Income Fund. "We continue to pursue an aggressive but focused strategy that positions us as the industry leader in real estate consulting and professional advisory services. These results demonstrate that this strategy is working."

Revenue for the fourth quarter 2007 was $47.5 million, compared to $29.7 million for the comparable period in 2006, a 60% increase. Revenue for the year ended December 31, 2007 was $148.1 million, compared to $96.1 million for the 12 months ended December 31, 2006. On a year-over-year basis, revenue increased 54%, of which 19% is attributable to revenue from entities acquired in 2007 and 35% from organic growth.

Revenue per person, a key productivity measure in the consulting industry, averaged $170,000 for the year ended December 31, 2007, compared with $157,000 for the same period in 2006.

Salaries and benefits were $26.6 million for the fourth quarter, compared to $16.1 million in the same period last year. Salaries and benefits for the year were $83.6 million, 57% higher than 2006, reflecting the growth in staff which numbered 1,089 at year end. Salaries and benefits have remained relatively constant as a percentage of revenue: 56% of revenue for the year ended December 31, 2007 compared to 55% for the same period last year.

Other operating expenses increased 82% for the fourth quarter to 5.7 million compared to 2006, due primarily to acquisitions, and were up 58% in 2007 versus the same period in 2006, from $10.5 million to $16.6 million, reflecting the expansion of the Fund's operations. Facilities costs are the Fund's third largest operating expense after salaries and benefits and disbursements, and they remained constant at approximately 4% of revenue.

Net earnings for the fourth quarter 2007 were $1.7 million or 16 cents per unit compared to $2.1 million or 20 cents per unit for the fourth quarter 2005; net earnings for the full year were $6.5 million or 61 cents per unit compared to $6.4 million or 66 cents per unit for the year ended December 31, 2006. Net earnings per unit are basic and diluted. The lower earnings per unit are due to higher amortization in the amount of $6.6 million in 2007, reflecting management's decisions to stop using predecessor company co-brands.

In the fourth quarter 2007, the Fund generated $8.1 million of adjusted distributable cash, or 49 cents per unit. Adjusted distributable cash generated for the year ended December 31, 2007 was $25.7 million, or $1.64 per unit.

During the fourth quarter 2007, distributions declared to the Fund unitholders and the unitholders of the Class B limited partnership units of Altus Group Limited Partnership were 30 cents per unit and resulted in a payout ratio of 61%. For the full year, distributions declared totaled $1.20 per unit and represented a payout ratio of 73%.

Altus made the following acquisitions in 2007:

- Ezra Consulting Ltd. focusing on the Natural Resources sector, expanded Geomatics service offerings into land use management, mapping and field services, closed in February 2007;

- Clayton Research Associates Limited specializing in real estate market analysis, land use planning issues, consumer spending and borrowing research, and building products demand, also closed in February 2007. Over the years Clayton has gained a reputation for intelligent and independent analysis and advice, based on extensive in-house expertise, a unique information base, leading edge analytical techniques and extensive contacts throughout Canada;

- Condon Survey Group Inc. has a mature client base concentrated in the oil and gas, mines and minerals, and municipal sectors, closed in April 2007. Condon expanded Geomatics geographic coverage into Saskatchewan, one of the country's highest-growth areas;

- Edwin Hill, Chartered Surveyors, a leading commercial property consultancy providing professional advice on all aspects of commercial property focused on owners and developers, in October 2007. Based in London, U.K. Edwin Hill services a broad client base that includes blue chip corporations, real estate companies and investment funds.

- Crape Geomatics Corporation, working primarily in the oil and gas and municipal sectors, uses a broad range of technological and dynamic processes to create detailed and accurate quality digital images to address the individual needs of each client, in December 2007.

Internally, many enhancements were implemented to build on our solid base of knowledge and expertise. The Research, Valuation & Advisory group achieved increased organic revenue growth by doing more with less. Realty Tax Consulting increased its organic revenue through a combination of improved staff allocation and more efficient work flow processes. Cost Consulting expanded geographically in key Canadian markets to meet the demand for services in the rapidly growing public-partnership infrastructure market.

Subsequent to year end, Altus announced three acquisitions: HealthTrust Canada ULC, Geocom Recherche Inc., and 2038951 Ontario Ltd. operating as Doug Dorey Real Estate Appraiser, for a combined value of approximately $7.9 million. HealthTrust Canada ULC and Doug Dorey are the leading providers of retirement home and long term care facility valuations in Canada. Incorporated in 1997, Geocom Recherche Inc. was the product of a merger of two firms with over 20 years of experience in providing retail research and market analysis to help clients better understand market trends. Altus Group financed these acquisitions with cash and bank financing, and by issuing units of Altus Group Limited Partnership.

"Altus continues to strategically target acquisitions that complement our expertise in areas earmarked as strategic priorities for future growth," said Yeoman. "We are meeting the demands of our national, and increasingly global, client base by anticipating the future of real estate ownership and its need for comprehensive, in-depth data and value-added analysis to give them an industry advantage."

Analyst Call Details

Altus Group Income Fund will hold an analyst conference call at 10:00 a.m. Eastern Daylight Time on Wednesday, March 19, 2008, to discuss these financial results and current industry conditions. Please dial 1-866-852-2121 (toll-free) or 416-695-9757 (GTA) to access the call. You will be required to identify yourself and your organization. A recording of this call will be made available beginning at 12:30 PM EDT. To access the recording, please call 1-800-408-3053 or 416-695-5800 (passcode: 3254969). The recording will also be available at altusgroupincomefund.com.

About Altus Group Income Fund

Altus Group Income Fund is the leading independent multidisciplinary provider of real estate consulting and advisory services in Canada, with a staff of over 1,100 professionals. Altus has a network of offices in 23 cities in Canada and 6 locations in England.

Forward-Looking Statements

Certain statements in this press release may constitute "forward-looking" statements, which involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Fund and its subsidiary entities, including Altus Group Limited Partnership, Altus Group Limited and All West Surveys Limited Partnership, or the industry, to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. When used in this press release, such statements use words such as "may", "will", "expect", "believe", "plan" and other similar terminology. These statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including those described in the Fund's publicly filed documents, including the Annual Information Form, Form 51-102F2, dated March 31, 2007 (which are available on SEDAR at www.sedar.com) and in this document under "Key Factors Affecting the Business". Those risks and uncertainties include: currency risk; general state of the economy; reliance on and retention of professionals; ability to maintain profitability and manage growth; competition in the industry; performance of obligations / maintenance of client satisfaction; fixed price and contingency engagements; revenue and cash flow volatility; protection of intellectual property; dependence on multi-residential market; dependence on oil & gas sector; possible acquisitions; interest rate risk; currency risk; credit risk; seasonality and weather; appraisal mandates; economic dependence; restrictions on potential growth; operating risks; risks of future legal proceedings; insurance limits; and legislative and regulatory changes. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this press release. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, the Fund cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this press release, and, except in accordance with applicable law, the Fund assumes no obligations to update or revise them to reflect new events or circumstances. Additionally, the Fund undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of the Fund, its financial or operating results, or its securities.

Non-GAAP Measures

Distributable Cash does not have a standardized meaning prescribed by GAAP, but is a measure generally used by Canadian open-ended income funds as an indicator of financial performance. The Fund calculates Distributable Cash in accordance with the interpretive release "Standardized Distributable Cash in Income Trusts and Other Flow-through Entities" issued by the Canadian Institute of Chartered Accountants.

Earnings before Interest, Taxes, Depreciation and Amortization, ("EBITDA"), represents revenue less salaries, general and administrative expenses but before interest, taxes, depreciation, amortization and non-controlling interest.

Contact Information

  • Altus Group Income Fund
    Sayla Nordin
    Director of Communications
    (416) 557-0939
    Email: altusgroupincomefund.com
    Website: www.altusgroup.com